It so happened that last week I sat down to compile the transaction records of 2020 in order to have a better picture of my option activity. I already use Quicken to look at loss/gain of my stocks/bonds/options, but Quicken does not provide some answers I was seeking. Quicken does not sort out the calls from the puts, nor take into account the effects of option assignments.
Here's what I found. The portion of contracts getting assigned is a lot higher than the 15% that I thought. There's nothing like counting the actual transactions using a spreadsheet, rather than guesstimating.
In 2020, I sold 1003 OTM covered calls for $205,459, and spent $21,916 to close some of them out prior to expiry. Net gain with premium from calls: $183,543.
I sold 840 OTM put options for $184,064, and spent $46,824 to buy some of them back. Net gain from puts: $137,240.
Total gain from option premium: $320,783. Quicken reports $318K, and the small difference is caused by using trading dates vs settling dates.
What I did not have a full grasp on are the following numbers.
Of the 1003 calls, 310 calls got assigned (31%), and the total stock sale was $2,961,085.
Of the 840 puts, 177 puts got assigned (21%), and the total stock bought was $1,413, 250.
Of course some shares got bought, then sold, and churned. I was surprised to see that the churning was that high. It's because the assignment rate was higher than I thought. Also, the sales were a lot higher than the purchases.
If I sold more than I bought, then why my stock AA was going up? I must have bought a lot of stocks outright, and not just via put assignments. I need to look into this to satisfy my own curiosity.
Anyway, you can see that while it is easy to count the money one makes from option premium, the only thing that matters is the total portfolio return.
PS. Last year, my stock AA was lower than now, and I had a larger pile of "active cash" with which to write puts. Hence, I made more money with puts last year than I do this year. Additionally, I try to refrain from writing puts, because I want to reduce my stock AA.